I'd used WeWork offices for solo work with no issues, so I didn't do sufficient diligence when I booked a conference room at one for a confidential client meeting. The room's walls were all clear and so thin that any conversation above a quiet murmur was easily heard from the hall outside. I asked the onsite manager for a more suitable room, but she told me they were all like that there. I ended up sticking the easel pad on the room's conference table and we spent the afternoon whispering to each other as we huddled around it.
Not checking things out in advance was on me of course, but it never dawned on me that their meeting rooms would be designed by people who'd apparently never been in a meeting before. In any case that was the last time I set foot in a WeWork.
My experience with this extends to private offices as well. Maybe I just drew the short straw with my neighbors but, if I'm managing people, I want to give them the courtesy of a noise-free call where they don't feel like they're being spied on (or like I'm being distracted).
I tried maybe 3 or 4 private office solutions during the pandemic's height, and each suffered from this. The "phone booths" are the best solution, imo, but they eat up credits and/or are always occupied.
I'd unironically like a huge warehouse of phone booths (like 3x3 offices) I can hole myself in all day. Why does that not exist? Is that just a cubicle farm with extra steps? I joke to my partner about setting up shop in our closet because it's quiet and distraction free.
Genuine question: Wouldn't this require a lot of ventilation / HVAC infrastructure?
It seems like in order to get 'really quiet' you need to have solid, noise-insulating walls on all 6 sides, which then makes it harder to ventilate (i.e., each cube gets it's own ductwork)
That said - I also like quiet spaces and if I was looking for a co-working space something that's mostly small, cozy, and quiet cubes would be perfect :)
Probably because he would end up having to spend the same money on a place with better conference rooms. Why pay for two co-working facilities, just so you can use one that has quiet meeting spaces?
WeWork was less about getting work done, and more about LARPing the experience of working for a FAANG and flexing someone else's money.
I like this question. Why would a person stop paying for something that doesn’t fully suit their basic needs? Obviously if a configuration that worked didn’t exist at WeWork, surely it couldn’t exist anywhere at all?
Pretty sad. I hope someone picks up the pieces and keeps the company going. Say what you will about the company and it's leadership, but WeWork as a service was splendid. Yes, there's lots of other short-term office providers, but I never found a competitor that executed on the vision of a world-wide lattice of places from which to work.
Having a place to work vastly opened up my vacation cycles. Instead of travelling for a single weekend, I could go visit a friend in Paris, or Mexico City, or back home, or wherever. During the week when people worked, I would work out of a WeWork. Come 4-5pm, I'd go hangout with the people I wanted to see. Suddenly a long-weekend trip could be feasibly expanded to a week or longer without much hassle.
That's right. A friend of mine sells premium offices and he's been saying WeWork's business plan made no sense at all for as long as I can remember.
Basically, in any premium office, you want to maximize the space for as many high value desks as possible. WeWork often spends a huge part of its space for perks and temp desks. In addition, WeWork attracts the startups/small business/solo crowd and those are far less stable customers than your money making enterprises. He routinely tells me very large customers often forgets that they're even paying for the office. That's the customer you want.
He was sure that WeWork had no future. He was right.
Not many people understand what that means. I remember Romney saying that GM needed to go through bankruptcy (meaning chapter 11) back when he was running for president. He got crucified for saying that, but he wasn’t wrong, and iirc, they did end up in chapter 11.
Hopefully, WeWork restructures successfully. I’ve really enjoyed the few I’ve visited, and I think there’s a real business under all the nonsense.
We used to be in Regus' offices, which had the option to use their spaces in other countries too. Not having used WeWork I do not know how it compares, but at least you can use Regus' office in Paris or Mexico City if you want.
Was working remotely like that difficult from a tax perspective? I know a lot of places will require you to file even if you are only working there a single day.
Guys, it’s chapter 11 bankruptcy. Wework is not going out of business. One of the top uses of chapter 11 is to renegotiate/break commercial leases. Wework is going to continue as a company though it may shut down some locations. It is absolutely going to use chapter 11 to pressure landlords to renegotiate leases.
During the second quarter, WeWork lost $397 million. It said it had $680 million of liquidity, $205 million of which was cash.
The company had net long-term debt of $2.9 billion as of June end and more than $13 billion in long-term leases, at a time when rising borrowing costs are hurting the commercial real estate sector.
I don’t know even if they want to continue operating the math isn’t mathing. And commercial landlords are also hurting badly so not sure they are in a position to make some sweetheart deal with WeWork.
WeWork doesn’t own any buildings, has the code base website and brand for its booking site, list of members, and some staff. Cheap 11 will likely remove executives, so all that’s left is the leases as far as a ‘business’. Which are worthless because new ones negotiated now would be way more favorable.
So it’s stripped to a brand and website and soled to Regus I bet.
I don't believe Chapter 11 has a very high survival rate, and whatever would emerge would not resemble WeWork except in name. They're essentially out of business in my mind (but have been for some time now).
Good. Now all of that commercial real estate can be picked up on the cheap. With the multibillion dollar initiative from the government to convert single zoned commercial space into mixed use space, this is a perfect opportunity for developers.
I'm on some weekly calls with multifamily investors and there is a small group that has spent the past couple years looking into this and came to the conclusion that commercial -> residential multifamily almost never works. Even if the building was free, apparently the per unit conversion costs are higher than just constructing new multifamily.
Judging by the number of coworking spaces near me, many of which seem to be pretty full, I'd be surprised if the business model is the issue. It seems like WeWork just got stuck paying long term leases originated in 2010-2020 but is now operating in a new world where commercial real estate is much less valuable.
I know WeWork has plenty of haters, but the idea of an international chain of coworking spaces makes a lot of sense. Where I live, I see lots of major companies opening up small satellite offices in WeWorks. I assume that they work out large deals for a bunch of small spaces around the county (or world) and that's preferable to negotiating with lots of separate locally owned coworking spaces. Meanwhile, if you are a fortune 500 and want to open a small office in Houston or Dublin, you don't need to sign a long-term lease and you can scale up or down as needed. That seems like something that'd be worth paying a premium for.
big if true. IMO wework defined a whole era of startups / working in tech, offering a cool environment with the flexibility to grow, shrink, or change locations as needed. it was also a great place to have an office for networking purposes.
even though it's had its fair share of controversy, I'd be sad to see wework shut down.
It's unlikely to go into liquidation and actually shut down.
This bankruptcy is about renegotiating and possibly exiting leases where they're not making money, and pushing that loss onto the building owners instead.
There will be fewer WeWork locations, but the company will still exist.
Regus / Spaces (the "hipper" version of Regus, same parent company) existed long before WeWork. They're not as nice because they're run as an actual business but they do exist around the world and are perfectly fine places to get work done.
I had the pleasure of dealing with Regus / Spaces trying to enforce their contract and collect payment for office rent even though I couldn't go to their offices due to COVID and lockdowns (this was during the peak of it in April of 2020). I have to disagree that this company is perfectly fine to do business with, after so many calls and emails with them over this absurd matter and their egregious business practices during a time of crisis, which they threatened collections on but luckily never pursued (at least that I'm aware).
Keep in mind this is their standard business practices, no matter what hardship or act of God that's preventing you from paying them.[0]
Their stock is down nearly 50% over the past 5 years, even 17% below where it was during the crash in 2020, so they aren't a gleaming example of success either.
Buildings like WeWork have always existed. I remember being a teen and being shown the new 'office concept' in the early 2000s where you could just tap into an office buildings internet infrastructure so you didn't need to rent your own T1 lines, you'd get a phone system and fax machines and all that for one flat fee.
If WeWork goes bankrupt, the investors will get wiped out but some other company will buy the buildings and it'll continue existing
WeWork doesn’t own the buildings, they lease space in them. The companies that own the buildings still have the problem of finding tenants, and WeWork let them access smaller tenants and thus a more diverse client portfolio than commercial real estate owners can normally be bothered to service.
Leasing to WeWork is a ‘gig economy’ side-hustle for a big office building owner to monetize more of their space, same as driving for Uber works as a side hustle for humans who want to monetize more of their time, or Airbnb lets homeowners side hustle to monetize their spare room.
Question is if without WeWork those buildings would continue to offer those services directly, sign on with a competitor platform, or do something else.
Maybe now WeWork has shown the opportunity, building owners would be prepared to leverage the platform to access the short term tenant base without requiring that WeWork lease the space first.
After all, you don’t have Uber pay to lease your vehicle or AirBnb sign a lease on your spare room before you join up to their platforms.
All of which suggests that WeWork actually has a pretty strong case for renegotiating their leases - they have their subletting revenue they can split with the property owner as leverage.
Regus has been around for a long time, I worked out of one of their offices in the mid-90s.
The great thing was that shared office space was new to most people, so when clients would visit they'd be impressed with the fancy building, the marble reception, and the huge conference room, and not know we were a 2-person shop renting a 6'x8' office.
Good context to share. I'm on the younger side, so when I entered the work force I think basically WeWork popularized this concept beyond what it had been. At least, it was the first place to expose me to that kind of work environment, which previously I was unaware had existed.
I won’t be sad to see them go. They were the most arrogant company I ever had the misfortune of dealing with (particularly for such a subpar product). If they treated their other customers like they treated me it’s no surprise they’re going bankrupt.
Any money going in now would subsidize landlords. They basically have to renegotiate leases, otherwise investors will just go down and take landlords down with them.
Readit News
Not checking things out in advance was on me of course, but it never dawned on me that their meeting rooms would be designed by people who'd apparently never been in a meeting before. In any case that was the last time I set foot in a WeWork.
I tried maybe 3 or 4 private office solutions during the pandemic's height, and each suffered from this. The "phone booths" are the best solution, imo, but they eat up credits and/or are always occupied.
I'd unironically like a huge warehouse of phone booths (like 3x3 offices) I can hole myself in all day. Why does that not exist? Is that just a cubicle farm with extra steps? I joke to my partner about setting up shop in our closet because it's quiet and distraction free.
It seems like in order to get 'really quiet' you need to have solid, noise-insulating walls on all 6 sides, which then makes it harder to ventilate (i.e., each cube gets it's own ductwork)
That said - I also like quiet spaces and if I was looking for a co-working space something that's mostly small, cozy, and quiet cubes would be perfect :)
Later, another person went into the phone booth and I could hear everything. What's the purpose of the phone booth if it can isolate sound?
Why? From your description, it sounds like they were serving one of your use cases perfectly well, but was not a good fit for your other use case.
WeWork was less about getting work done, and more about LARPing the experience of working for a FAANG and flexing someone else's money.
Having a place to work vastly opened up my vacation cycles. Instead of travelling for a single weekend, I could go visit a friend in Paris, or Mexico City, or back home, or wherever. During the week when people worked, I would work out of a WeWork. Come 4-5pm, I'd go hangout with the people I wanted to see. Suddenly a long-weekend trip could be feasibly expanded to a week or longer without much hassle.
Basically, in any premium office, you want to maximize the space for as many high value desks as possible. WeWork often spends a huge part of its space for perks and temp desks. In addition, WeWork attracts the startups/small business/solo crowd and those are far less stable customers than your money making enterprises. He routinely tells me very large customers often forgets that they're even paying for the office. That's the customer you want.
He was sure that WeWork had no future. He was right.
WeWork is considering filing for Chapter 11 protection. They're not going for liquidation.
Hopefully, WeWork restructures successfully. I’ve really enjoyed the few I’ve visited, and I think there’s a real business under all the nonsense.
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I just want back the economy that could keep WeWork afloat.
The question is whether that product would have ever been sustainable—had the company been better managed.
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The company had net long-term debt of $2.9 billion as of June end and more than $13 billion in long-term leases, at a time when rising borrowing costs are hurting the commercial real estate sector.
I don’t know even if they want to continue operating the math isn’t mathing. And commercial landlords are also hurting badly so not sure they are in a position to make some sweetheart deal with WeWork.
So it’s stripped to a brand and website and soled to Regus I bet.
[1] https://seekingalpha.com/article/4472388-what-is-chapter-11-...
[1] https://www.whitehouse.gov/cea/written-materials/2023/10/27/...
I'm on some weekly calls with multifamily investors and there is a small group that has spent the past couple years looking into this and came to the conclusion that commercial -> residential multifamily almost never works. Even if the building was free, apparently the per unit conversion costs are higher than just constructing new multifamily.
I know WeWork has plenty of haters, but the idea of an international chain of coworking spaces makes a lot of sense. Where I live, I see lots of major companies opening up small satellite offices in WeWorks. I assume that they work out large deals for a bunch of small spaces around the county (or world) and that's preferable to negotiating with lots of separate locally owned coworking spaces. Meanwhile, if you are a fortune 500 and want to open a small office in Houston or Dublin, you don't need to sign a long-term lease and you can scale up or down as needed. That seems like something that'd be worth paying a premium for.
even though it's had its fair share of controversy, I'd be sad to see wework shut down.
This bankruptcy is about renegotiating and possibly exiting leases where they're not making money, and pushing that loss onto the building owners instead.
There will be fewer WeWork locations, but the company will still exist.
Keep in mind this is their standard business practices, no matter what hardship or act of God that's preventing you from paying them.[0]
Their stock is down nearly 50% over the past 5 years, even 17% below where it was during the crash in 2020, so they aren't a gleaming example of success either.
0. https://www.google.com/search?q=regus+collections+reddit
If WeWork goes bankrupt, the investors will get wiped out but some other company will buy the buildings and it'll continue existing
Leasing to WeWork is a ‘gig economy’ side-hustle for a big office building owner to monetize more of their space, same as driving for Uber works as a side hustle for humans who want to monetize more of their time, or Airbnb lets homeowners side hustle to monetize their spare room.
Question is if without WeWork those buildings would continue to offer those services directly, sign on with a competitor platform, or do something else.
Maybe now WeWork has shown the opportunity, building owners would be prepared to leverage the platform to access the short term tenant base without requiring that WeWork lease the space first.
After all, you don’t have Uber pay to lease your vehicle or AirBnb sign a lease on your spare room before you join up to their platforms.
All of which suggests that WeWork actually has a pretty strong case for renegotiating their leases - they have their subletting revenue they can split with the property owner as leverage.
The great thing was that shared office space was new to most people, so when clients would visit they'd be impressed with the fancy building, the marble reception, and the huge conference room, and not know we were a 2-person shop renting a 6'x8' office.